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One of the traders accessories in developing mechanisms of candlestick charts are the candlestick patterns. Candlestick patterns are helpful for making effortless systems that will advise you regarding the establishment of a trend in order for you to begin trading.

Candlesticks have a structure that exhibits the open, high, low and closing price of a currency, stock or commodity over a time frame. This period can be picked by the trader.

The popular time period is 5 minutes but you may choose in specific situations to take 15 minutes. For longer term trading you can opt for longer periods.

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The difference between open and close points are represented by the candle body. If it is white (or green/blue on a colored chart) the open is the lower boundary of the elongated body and the price increased during the period you are examining. A red (for colored charts) or black indicates the upper boundary is the opening price, whilst the price cascaded during that period.

In candles, vertical lines poking up from the top and down from the bottom are known as wicks. The top of the upper area of wick is the highest position that the price ever attained during the period. The bottom of the lower wick is the low.

The advantage of this method of analysis is that the trader can straight off see whether prices rose or fell over the period. Bear markets are represented by green or white candles albeit bull markets are illustrated by red or black candles.

The relationship of open and close values to high and low values can be examined immediately. You may have a candle that is extensiovely solid, sans the wick.

The name for this is Marubozu pattern. Prices never went more or less than the opening and closing prices in this situation.

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he high value as opening price and low value as closing price is represented by the red or black candle. Contrarily, green or white candle means the low was the opening price while the high was the closing price.

A long body indicates a fairly steady direction either downward or upward. A lengthy wick positioned on either bottom or top would denote a reversal.

For accurate trend index a candlestick needs to be studied in conjunction with the others that preceded it. From there relatively intricate trends can be devised to demonstrate the trends in the future.

Note: FX trading is speculative, may end up in substantial losses, and is not appropriate for everyone.

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